By virtue of Legal Notice 306 of 2012, The Highly Qualified Persons Rules have been extended from financial services and gaming industries to include the aviation industry. The rules allow eligible persons to benefit from a 15% reduced tax rate on any annual emoluments amounting to at least 75,000 euro. This applies to persons occupying senior positions within the aviation industry who are considered as ‘eligible officers’.
An eligible officer is any individual employed with an undertaking holding an air operators’ certificate issued by Transport Malta. Such persons include Aviation Accountable Managers, Aviation Continuing Airworthiness Inspectors, Aviation Flight Operations Inspectors and Aviation Training Managers. Any individual who is employed with a company holding an air operators’ certificate prior to the 1st January 2012 does not benefit from such rules.
Such persons must have the necessary professional qualifications and may not be domiciled in Malta. Moreover, all income must be in respect of work carried out in Malta or in respect of any period spent outside Malta in connection with such work or duties.
Any income amounting to more than 5,000,000 euro per annum and derived from a qualifying contract of employment will not be subject to tax in Malta on the amount exceeding 5,000,000 euro.
The 15% reduced tax rate will only apply for five consecutive years in respect of EEA and Swiss Nationals or for four years in respect of third country nationals.
In order to enable the employee to benefit from the reduced tax rate of 15%, the employee must not have benefitted from any exemptions on certain fringe benefits listed in Article 6 of the Income Tax Act whilst the employer must not have received any form of benefits, whether directly or indirectly, under the Malta Enterprise Act or Business Promotion Act.
Any eligible person interested must present a signed declaration, authorized by competent authorities, and attach the said document to their tax return.
Please do not hesitate to contact us should you need any further information.